Project Summary/Abstract In order to improve health outcomes while reducing costs, Medicaid Value Based Payment (VBP) models reward providers for quality. Early evidence from state agencies suggests that Medicaid VBP models had moderate success in meeting their health and economic targets for the average beneficiary. However, despite the fact Medicaid is a critical payer for costly healthcare needed by adults with Serious Mental Illness (SMI), little is known about VBP effects on Medicaid beneficiaries with SMI, especially those belonging to racial/ethnic minority groups. Our research team and others have documented significant disparities in access, quality, and outcomes of healthcare for Black and Latino relative to White adults with SMI. We and others have also shown that policies with average beneficial effects for people with mental illnesses may not benefit everyone equally?e.g., we demonstrated that while the Affordable Care Act improved access to mental healthcare, it had no impact on the wide racial/ethnic disparities in access to mental health treatment. The challenges of navigating service delivery changes in VBP may be greater for people with SMI and for minority patients due to poorer baseline healthcare access and quality and their greater social disadvantage. A lack of data on the equity impacts of VBP for racial/ethnic minorities with SMI is a crucial evidentiary gap. We propose to evaluate the impact of VBP models on racial/ethnic disparities in mental health treatment among patients with SMI. We will use longitudinal 2010-2019 Medicaid claims from Oregon and New York, two states that have implemented hybrid VBP models targeting both providers and managed care organizations, and link these data to national provider data and area-level characteristics. For each state, we evaluate (a) the overall impact of VBP models as well as (b) investigate the impact of different VBP models within states (i.e., the differential impact on disparities attributed to variation in how managed care organizations contracted with providers). Our primary analyses estimate the differential impact of VBP implementation, among Medicaid beneficiaries with SMI, by race/ethnicity (White, Black, or Hispanic/Latino) for healthcare: (Aim 1) access, (Aim 2) quality, (Aim 3) effectiveness, and (Aim 4) costs. The proposed research will provide meaningful evidence to states considering VBP adoption. It is consistent with NIMH Strategic Objective 4.1 (Improve the efficiency and effectiveness of existing mental health services through research), and seeks to fill the evidentiary gap in the effects of state policies on equitable health care for individuals living with SMI.